French opposition seeks more savings, less tax in 2013 budget

Published 11:00 AM ET Sun, 11 Nov 2012

PARIS, Oct 3 (Reuters) - France's opposition UMP party will push to rebalance the Socialist government's 2013 budget more towards spending cuts and away from tax hikes when the bill goes through parliament, a senior party member said on Wednesday.

President Francois Hollande's government presented the toughest budget in decades last week, counting mostly on tax increases to raise revenues.

Conservative UMP lawmakers want 5-10 billion euros ($6.5-13 billion) in additional savings measures to be written into the budget and tax hikes to be more limited, the chairman of the National Assembly's finance commission, Gilles Carrez, said.

The budget bill, which parliament will debate starting Oct. 16, would raise an extra 10 billion euros in taxes on companies and a further 10 billion in higher taxes mainly on wealthy households.

It includes plans for spending cuts of 10 billion euros, mainly by holding back spending growth rather than cutting outright public expenditure.

"We want to get (the balance) to half tax increases, half savings," Carrez told journalists. "For us the priority on tax increases is to spare companies."

The government has pledged to cut the public deficit next year to 3 percent of gross domestic product.

Hollande is facing growing dissent from within his own Socialist Party over the government's commitment to the 3-percent target as the economy increasingly struggles.

Among voters, Hollande's approval rating has tumbled to its lowest since he took office in May with 41 percent having confidence in him, according to a poll published on Wednesday.